Morgan Stanley Offloads 47.69 Lakh Shares in Zee Learn

In a significant move, Morgan Stanley Asia PTE Ltd (ODI) account offloaded a total of 47,69,108 shares of Zee Learn, part of the Zee Entertainment group owned by Subhash Chandra family. The deal was struck at a price of Rs.18.44 per share taking the total value of the deal to Rs.8.79 crore. The entire deal was via open market transactions on the NSE and was reported in the bulk deals segment of the NSE.

Morgan Stanley was not the only seller. In addition, IndusInd Client account also sold 71.33 lakh shares of Zee Learn  at a lower price of Rs.17.44 on the same day. However, there were buyers too in the counter. Spring Ventures had acquired a total of 50 lakh shares in the Zee Learn counter at a price of Rs.19.57 per share. Post the Morgan Stanley trade, the stock of Zee Learn corrected by over 4% on 06th January.

What is more interesting is that this decision by Morgan Stanley comes exactly a day after reports in the media that India’s most valuable EdTech company, Byju’s, was looking to buy a majority stake in Zee Learn. This news sounded credible as Byju’s has been on an extremely aggressive inorganic expansion spree over the last 3 years, both in India and abroad. However, Zee Learn had dismissed the news as being speculative.

In fact, CNBC TV-18 had gone to the extent of reporting on Wednesday that Byju’s was likely to acquire a 51% stake in Zee Learn through a mix of preferential issue and sale of shared by stakeholders. The extent of detailed reporting in the case of “apparently speculative” reports is not only intriguing but also surprising. The news report is source based, but as we have seen in such cases, there is normally always some truth in such reports.

The price of Zee Learn had oscillated between Rs.20.70 and Rs.9.75 over the last one year and in early trades on Friday, the stock is nearly 10% down. The company is actually a micro-cap with a market capitalization of just about Rs.574 crore. Zee Learning had reported ROE of 3.32% in its last completed full year of reporting and the company currently trades at a P/E ratio of 37.8 on a historical return basis.

ODI (offshore derivative instrument) suffixed to the name of the seller (Morgan Stanley) indicates that it is an overseas derivative instrument, which means this sale is done by Morgan Stanley on behalf of an offshore P-Note holder.